Previously, KPPI initiated a safeguard investigation on October 27, 2023. The products proposed to be subject to safeguard measures: cotton yarn classified under HS codes 5204.11.10, 5204.19.00, 5204.20.00, 5205.11.00, 5205.12.00, 5205.21.00, 5205.22.00, 5205.24.00, 5205.26.00, 5205.32.00, 5205.41.00, 5205.42.00, 5205.43.00, 5205.47.00, 5205.48.00, 5206.11.00, 5206.12.00, 5206.14.00, 5206.21.00, 5206.23.00, 5206.24.00, 5206.25.00, 5206.31.00, 5206.32.00, 5206.33.00, 5206.42.00 and 5206.45.00.
The investigation period is from 2019 to 2022 and then during the investigation it is updated from 2021 to 2024.
Increase in imports:
In absolute terms, imports increased by 7.3% during 2021-2024. Despite a decline from 2022 to 2023, imports recovered and increased in 2024.
In relative terms, there was a sharp increase in the volume of imports relative to domestic production during the investigation period, from 100 index points in 2021 to 122 points in 2022, further increasing to 176 points in 2023, and further increasing to 195 points in 2024. During the period 2021–2024, the volume of imports relative to domestic production increased by 26.70%.
Main exporting countries to Indonesia:
Vietnam accounts for the largest import share in Indonesia in 2024, accounting for 42.94% of total imports. Other countries with import shares exceeding 3% in 2024 include: China (26.88%), India (11.85%), Malaysia (4.15%), Türkiye (3.43%), and other member states with a total market share of 2.89%. With the largest import volume, Vietnam does not qualify for the exemption from the safeguard measure.
Unforeseen developments:
KPPI concluded that the increase in imports was the result of unforeseen developments such as the disruption of the supply chain due to the Covid 19 pandemic, the shift of cotton yarn production from China to other countries in the region due to the US-China trade war, India's policy of restricting raw cotton exports leading to an increase in cotton yarn production and exports from this country, and China's policy of banning cotton yarn imports from Xinjiang to the United States leading to a sudden increase in imports from China to Indonesia.
Damage to domestic industry and causal relationship:
According to the KPPI Conclusion, the increase in imports has caused serious damage to Indonesia's domestic manufacturing industry, reflected in factors such as decline in market share, production output, domestic sales, reduction in capacity and employment, increased financial losses, etc.
KPPI also determined that the above injury was directly caused by the increase in imports and not by other causes.
Safeguard measures applied:
On that basis, KPPI proposed that the Indonesian Government apply safeguard measures in the form of absolute tax on imported cotton yarn in 03 stages, specifically:
Phase 1: tax 13,419 rupiah/kg
Phase 2: tax 12,614 rupiah/kg
Phase 3: tax 11,809 rupiah/kg
KPPI proposed that the time for applying the measure is after the announcement of the tax imposition order by the Indonesian Ministry of Finance in the official gazette.
Consultation:
KPPI requests interested parties to submit written requests for consultation within 07 days from the date of KPPI's announcement of the final conclusion. All written requests must be submitted in hard copy and electronically, indicating the name, address, email, and telephone number of the party requesting consultation. The consultation is expected to be held online.
Recommendation:
The Department of Trade Remedies recommends that manufacturing/exporting enterprises affected by safeguard measures should consider the following contents:
+ Carefully study the Final Conclusion of Indonesia, send comments and consultation requests to KPPI and participate in consultations if necessary;
+ Diversify products and export markets to minimize the impact of safeguard measures.
Download related documents here
For more information, please contact: Foreign Trade Remedies Handling Department, Trade Remedies Authority, Ministry of Industry and Trade , No. 23 Ngo Quyen, Hoan Kiem District, Hanoi. Specialist in charge: Bui Anh Dung. Email: [email protected] ; [email protected] ; [email protected] .
See details here
Source: https://moit.gov.vn/tin-tuc/thi-truong-nuoc-ngoai/indonesia-ban-hanh-ket-luan-cuoi-cung-vu-vic-dieu-tra-tu-ve-doi-voi-soi-bong-nhap-khau.html
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